Which Tenancies Are Affected?
All new assured shorthold tenancies in England that start on or after 1 October 2015
All remaining assured shorthold tenancies in England will be swept up under the new rules on 1 October 2018
What Is Changing?
Timing: A Section 21 Notice cannot validly be served in the first four months of a tenancy
Expiry: If proceedings are not issued within 6 months of the service of a Section 21 Notice then the notice will be invalid
Form: A new form of Section 21 Notice will be required for Section 21 proceedings (See more here)
Process: A landlord or their agent’s failure to provide the required information to tenants during a tenancy can invalidate a Section 21 Notice
Repairs: Failure to follow the prescribed and time-limited repairs process set out can both invalidate a Section 21 Notice and prevent one from being served for a further six months
What Does This Mean For You?
The enforcement of the landlord or their agent’s omissions will be highlighted by a tenant not wanting to move out of their property NOT a Governmental investigation.
The prescribed process under the Deregulation Act extends to common parts (eg in build to rent developments) where the landlord under the assured shorthold tenancy also controls the common parts.
In short, having robust repairs processes in place is critical for letting agencies and landlords who manage properties in England.
Section 21: Repairs Process
The changes relate to a prohibition on retaliatory eviction which is the situation in which a tenant complains about the condition of their property to their landlord or to their landlord’s agent and instead of resolving the complaint the landlord issues a section 21 notice.
Landlords and letting agents are expected to provide an “adequate response” within 14 days of receipt of a tenant’s complaint about the condition of their property.
What’s The Upshot?
Any failure to deal with repairs properly could become a lot more expensive.
From a landlord’s perspective, unless a property is properly maintained they may not be able to re-let their rental property for six months from the date on which a local authority serves an improvement notice (Cat 1 or 2 Hazard) or an emergency remedial action notice.
From a letting agent’s perspective, the liability and reputational consequences of missing repairs have become far more serious.
The Fixflo 2015 Rental Repairs Survey highlighted that 54% of property managers knew a landlord who changed letting agency due to a repair related issue.
This number looks likely to rise unless letting agencies put in place robust processes for handling written repair requests.
There is also a high level of public awareness of retaliatory eviction with over 17,000 signatories in favour of (and national press coverage about) a recent (but unsuccessful) Bill to prohibit retaliatory eviction.
This means that letting agency staff are likely to be asked about the changes by existing clients, prospective clients and tenants.
It is also likely that enquiries will be raised on the sale of an investment property with the purchaser requesting details of repair requests and copies of each associated “adequate response”.
What Can You Do?
Don’t panic but do prepare. If you manage properties on behalf of landlords/freeholders you should review your repair management processes and we suggest the following checklist to get set for the new law which is expected to come into force for new tenancies which start in (or after) October 2015:
- Get prepared for written repair requests to become the norm. Put a written repair reporting structure in place so your property management team does not have to wade through flowing prose to work out what has actually gone wrong.
- Consider how written repair requests will affect your team if your tenant base speaks a range of languages. The legislation provides for tenants to report repairs in writing but doesn’t say that reports have to be in English.
- Make sure that you have processes in place to ensure that no repair is ever missed. An audit trail of each repair request from start to end will help to show not only that you acted correctly but allow you to evidence that you have done so by providing an adequate response.